Key Takeaways:
US natural gas futures fell on Thursday as the EIA projected storage to reach 3,985 bcf, a 10-year high.
The EIA's Short-Term Energy Outlook projects end-October storage at 3,985 bcf, the highest in 10 years and 5 percent above the five-year average, according to the agency's August forecast. The projection follows a larger-than-expected weekly build that pushed inventories 6.7 percent above their five-year seasonal average, a sign of ample supply.
US dry gas production held at 112.0 bcf per day, up 2.3 percent year-over-year, while Lower 48 demand was 83.2 bcf per day, down 0.3 percent, BNEF data show. LNG net flows to export terminals were 17.6 bcf per day, down 1.3 percent week-over-week. September Nymex gas settled down 0.97 percent on Tuesday at the prior session's close.
The supply outlook weighs on prices even as the EIA raised its 2026 US dry gas production forecast to 111.2 bcf per day. Warmer-than-normal temperatures forecast across the South for Aug 16-20 could lift power-sector demand, but a potential El Niño this fall and winter threatens heating demand.
Additional supply is set to arrive as Energy Transfer's Hugh Brinson pipeline reaches full capacity of 1.5 bcf per day by Sept 1, allowing more Permian gas to reach the Henry Hub benchmark in Erath, Louisiana. US electricity output in the week ended Aug 1 rose 0.9 percent year-over-year to 100,254 gigawatt-hours, the Edison Electric Institute reported.
Natural gas at these levels sits well below global benchmarks, with European TTF gas trading near multi-year highs and Asian JKM elevated, as US cargoes remain a key source of supply for overseas buyers. The storage surplus versus the five-year average gives US producers little incentive to cut output, keeping the market well supplied into the winter heating season.
This article is for informational purposes only and does not constitute investment advice.
